Insured when pink pigs fly
· By: Drivers.com staff
· Date: 2006-02-28
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Maybe we shouldn't be that shocked when home owners whose houses were demolished by hurricane Katrina damage report that their insurance claims were dismissed. Many drivers who suffered in auto crashes have had similar experiences.
Recently, a Colorado motorist was awarded a $3 million settlement by a Denver court on the basis that his insurance company, American Family Insurance (AFI), had not dealt with him fairly. Colorado's insurance commissioner promised to investigate.
The "when pink pigs fly" reference came from a deposition by a former AFI employee who alleged that a senior case manager had a toy plastic pink pig with wings on her desk and asserted that she would only approve a claim when pink pigs fly. They were happy when they would deny claims, the employee said. "They'd push the button and make it flap its wings."
The allegations came from a case in which University of Colorado professor, Dominic Peressini, was severely injured in an auto accident, and his insurance company refused to pay up. Peressini, 39, had sought 85 percent of his lost wages ($125,000) during a year-long sabbatical following a 2003 car accident that left him with a brain injury and mangled arm.
Peressini's lawyer maintained that he had uncovered unethical practices and a company culture in which, he said, company supervisors systematically treated AFI clients unfairly.
In response, a representative of American Family Insurance said, "Any sort of office humor regarding the outcome of a claim review would have been inappropriate. But to portray the toy as anything other than a desktop knickknack is an extreme distortion of how our company conducts business."
But Peressini's attorney, Sam Livingston, thinks his clients case was an example of "a corporate culture that got to the point where this level of cynicism was tolerated," he said. Other depositions in the case indicated that AFI intended to reduce payouts on claims based on competition and not the facts. A company business plan urged employees to reduce payouts by 28 percent over four years.
During a taped deposition for the case, Livingston queried AFI representative Phil Scott about how the case was handled. Scott was unapologetic.
"I don't think we've done anything wrong," he insisted.
